Samvardhana Motherson Shares Zoom 5% After Announcing EUR 50 Mn Cost Optimisation Drive

Samvardhana Motherson International has announced a significant cost optimisation initiative targeting EUR 50 million in savings. This strategic move aims to enhance the company's profitability amidst prevailing global uncertainties. The company, through its subsidiary SMRP BV, has proactively initiated a series of transformative measures in Central & Western Europe to improve operating efficiencies. While the exact roadmap for this cost optimisation was not disclosed, the scale of the initiative indicates a strong emphasis on operational discipline and the creation of long-term value.

Samvardhana Motherson Shares Zoom 4.69% to ₹118.31

Following the announcement of the EUR 50 million cost optimisation drive, shares of Samvardhana Motherson International experienced a significant surge, zooming 5.7% to an intraday high of ₹119.60 on the BSE on Friday, April 11. This positive market reaction reflects strong buying interest in the stock following the company's proactive strategy to improve efficiencies. 

Immaterial Tax Penalty of ZAR 4.98 Million for MSSL RSA

Samvardhana Motherson also informed exchanges about a tax assessment notice received by its step-down subsidiary, MSSL Global RSA Module Engineering (MSSL RSA), from the South African Revenue Services (SARS). The notice includes a penalty of ZAR 4,985,770 (around ₹2.20 crore) for the late payment of provisional tax for FY 2023-2024. However, Motherson clarified that this penalty is deemed immaterial and will not have a significant impact on its financials or business operations.

One-Year Decline of 3.95% in Samvardhana Motherson Shares

Despite the recent positive movement, the shares of Samvardhana Motherson have experienced a decline of 3.95% over the past year. Furthermore, on a year-to-date (YTD) basis, the stock has fallen by 27.15%, and the six-month performance shows a steep decline of 45.12%. Over the last three months, the stock is down by 23.94%, and in the past month alone, it has slipped by 11.50%, indicating sustained downward pressure across various key timeframes.

Global Cues: US Tariff Pause and China Duties 

The positive sentiment in the Indian market was partly attributed to positive global cues, including a pause in US tariff hikes for most countries, excluding China. While former US President Donald Trump announced a 90-day suspension of reciprocal tariffs on up to 75 countries, China now faces a steep 145% tariff. This development led to a sharp rally in US markets on Wednesday, with the Dow Jones surging over 3,000 points. However, this optimism was short-lived, as US equities reversed course on Thursday. The US move to hike duties on China, while making exceptions for some products, has kept global markets jittery, with Asia-Pacific markets trading lower.

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